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Trends of labour productivity in Italy: a study with panel co‐integration methods

Trends of labour productivity in Italy: a study with panel co‐integration methods Purpose – The main aim of this paper is to examine labour productivity trends in Italy over the period 1981‐2004. Design/methodology/approach – To this end, relying on recent developments in the analysis of non‐stationary dependent panels, the paper develops a new method for estimating total factor productivity (TFP) trends. Findings – The conclusions confirm the view that the recent decline in Italian labour productivity growth is mostly due to a widespread fall in TFP growth. Research limitations/implications – The main assumption underlying the proposed TFP estimation method is that technology growth is driven by a single trend common to all units included in the panel (industries, regions or countries). Originality/value – The paper provides two distinct contributions: empirically, it provides robust evidence that TFP slow‐down is the main cause of recent negative trends in labour productivity in Italy. Methodologically, the paper proposes an approach to estimating TFP that enjoys several advantages: only basic data for input and output flows are needed, the non‐stationary nature of the data is explicitly taken into account, and confidence intervals for TFP growth can be computed. This method can thus be easily applied to many routinely available datasets, to either corroborate existing growth accounting estimates or to obtain previously unavailable estimates. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Manpower Emerald Publishing

Trends of labour productivity in Italy: a study with panel co‐integration methods

International Journal of Manpower , Volume 31 (7): 15 – Oct 19, 2010

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References (39)

Publisher
Emerald Publishing
Copyright
Copyright © 2010 Emerald Group Publishing Limited. All rights reserved.
ISSN
0143-7720
DOI
10.1108/01437721011081581
Publisher site
See Article on Publisher Site

Abstract

Purpose – The main aim of this paper is to examine labour productivity trends in Italy over the period 1981‐2004. Design/methodology/approach – To this end, relying on recent developments in the analysis of non‐stationary dependent panels, the paper develops a new method for estimating total factor productivity (TFP) trends. Findings – The conclusions confirm the view that the recent decline in Italian labour productivity growth is mostly due to a widespread fall in TFP growth. Research limitations/implications – The main assumption underlying the proposed TFP estimation method is that technology growth is driven by a single trend common to all units included in the panel (industries, regions or countries). Originality/value – The paper provides two distinct contributions: empirically, it provides robust evidence that TFP slow‐down is the main cause of recent negative trends in labour productivity in Italy. Methodologically, the paper proposes an approach to estimating TFP that enjoys several advantages: only basic data for input and output flows are needed, the non‐stationary nature of the data is explicitly taken into account, and confidence intervals for TFP growth can be computed. This method can thus be easily applied to many routinely available datasets, to either corroborate existing growth accounting estimates or to obtain previously unavailable estimates.

Journal

International Journal of ManpowerEmerald Publishing

Published: Oct 19, 2010

Keywords: Productivity rate; Labour; Italy

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